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Updated May 15, 2024, 6:35am EDT
tech

Tech critic McCourt mounts TikTok bid

Nasser Berzane/Abacapress.com via Reuters Connect
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The Scoop

A billionaire tech critic says he is mounting a bid to buy TikTok, the massive Chinese-owned social media app whose parent company faces US government pressure to sell.

Frank McCourt, the executive chairman of a family real estate giant, McCourt Global, and founder of tech and innovation initiative Project Liberty, told Semafor in an interview Tuesday that he plans to buy and rebuild TikTok as “a new and better version of the internet where individuals are respected and they own and control their identity and their data.”

“TikTok presents the best and worst of the internet. It connects 170 million people and allows them to be creative and build things and enjoy things and do things,” he said. “On the other hand, they don’t get to really share in the value that’s created, and their data is scraped and stolen and shipped to China.”

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McCourt said he’s retained the investment bank Guggenheim Securities to advise him on what he calls the “people’s bid,” and said he’ll seek money — TikTok could cost $100 billion — from foundations, endowments, and pension funds, as well as broad based public support.

“We want all the capital to be values-aligned [around] a new and better version of the internet, where individuals are respected and they own and control their identity and their data,” McCourt said.

If he is able to assemble an investor group, he will still likely face intense competition from giant American companies eager to swallow TikTok’s huge advertising business and user base. Donald Trump’s 2020 attempt to force a sale drew interest from Microsoft and a group that included Oracle and Walmart. (Microsoft’s CEO later called the process “the strangest thing I’ve worked on.”) This time around, former Treasury Secretary Steven Mnuchin, fresh off leading the rescue of a New York bank, has also expressed interest in TikTok.

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Know More

TikTok’s Chinese owner, ByteDance, is fighting new legislation in court that would force it to either sell the app or see it shut down. If it loses in court and opts for a sale, the big question hanging over any deal is whether it would include TikTok’s algorithm, which powers its magic-feeling ability to serve users videos that suit their interests. Without it, TikTok might be worth far less to any buyer.

Estimates of its current value vary widely around the $100 billion dollar mark, on reported revenues of about $16 billion in 2023.

McCourt proposes shifting key elements of TikTok to a technical architecture developed at Project Liberty, which he founded. Users’ accounts would be migrated to software that is compliant with the project’s Decentralized Social Networking Protocol, giving them more control of their digital identities and personal data. Creators would control their own videos and have the option of monetizing them elsewhere. And users — McCourt said he prefers the term “people” — would have explicit control over what videos they see and how much data they share, he said.

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Ben’s view

McCourt is arriving with a deep critique of the platform he’s trying to buy, and other, similar US-owned social media giants.

And Project Liberty’s bid may also force questions about the terms under which TikTok could be sold, and under which American social media companies operate as well. McCourt is one of a handful of leading voices who have been pressing for a vision of social media that is structured very differently, and while there are differences between proposals, most share key features, including the possibility of users’ identities, their relationships with other people, and the content they produce functioning across different platforms — rather than being locked into a single one.

The shift to Project Liberty’s open-source protocol would also move “the patient out of a dark cave into the hospital where you can have lights on the problem,” said Braxton Woodham, who leads the project’s software group, called Labs.

McCourt may have to convince investors that the shift won’t imperil TikTok’s business. But he’s launching the bid with the support of prominent figures including the internet pioneer Tim Berners-Lee, who said in a statement that a remade TikTok “will embrace the critical values of privacy, data sovereignty, and user mental health.”

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Room for Disagreement

“There’s a Problem With Banning TikTok. It’s Called the First Amendment,” Jameel Jaffer, executive director of the Knight First Amendment Institute at Columbia University, wrote last year. “The platform’s users include more than 150 million Americans … TikTok’s American users are indisputably exercising First Amendment rights when they post and consume content on the platform.”

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Notable

  • McCourt laid out his approach to tech in a recent book, Our Biggest Fight, excerpted in Fast Company: “Like poor, powerless subjects of monarchs and aristocrats, we are serfs, subjugated by a small group of companies that have exploited a feudal internet architecture.”
  • TikTok creators are leading the federal lawsuit to stop the ban.
  • TikTok isn’t that different from other social media apps, Kyle Chayka wrote in The New Yorker: “If the core concerns are digital-data surveillance and the targeting of individual users in ways that can manipulate or endanger them, then we have plenty of domestic threats to face first.
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